Refocus USDA OCIO Acquisition Approval Request (AAR) Process
The threshold for OCIO approval of IT purchases, as stated in §711, Title VII of the USDA Appropriations Act, is $25,000. Prior to 2005, this threshold was $250,000. To speed procurement (and thus more evenly distribute the procurement workload throughout the fiscal year), recommend returning to the $250,000 OCIO approval threshold.
At an OCIO briefing earlier this year, OCIO staff briefed the CIO Council on the Lean Six Sigma AAR process review. The time for processing AAR’s is generally measured in months, and in response to a question staff stated that about 97% of AAR’s are approved (with or without conditions).
A review of AAR’s submitted between 2/3/10 and 7/13/10 revealed the following:
• 68 AAR’s were submitted for processing
• 65% were approved, 35% remain pending
• Of the AAR’s approved, 54% took more than 50 calendar days to approve; the average AAR processing time is 55 calendar days; one took 158 days
• Over 1/3 (37%) of the total AAR’s submitted were for less than $250K, totaling about $2M
• The total value of the 68 AAR’s is about $465MM
• Thus 37% of the AAR’s submitted reflect only 0.004% of the total value of AAR’s submitted
• At least thirteen individuals must approve each AAR (presumes no other staff reviews AAR’s)
If 97% of AAR’s are approved, there is reason to question why the process should exist at all. If the objective is to inform OCIO about IT purchases across USDA agencies, e.g., for the purpose of identifying procurement aggregation/savings or reducing duplicative IT applications, a simple copy of procurement form AD-700 to the 13 AAR reviewers could accomplish this.
If it is determined that, notwithstanding the lack of value created by the investment of 13 FTE’s reviewing over 100 AAR’s per year (97% approved), then the dollar threshold for review and approval should be returned to the original $250,000 to either reduce the number of FTE required to process AAR’s by up to 1/3 (4 FTE) or reduce the throughput time required to approve the remaining AAR’s valued greater than $250,000.